My Internet was out for a few days a couple of weeks ago, during this time I was catching up on some reading. After a 'bit' I got to thinking about Bitcoin and a few ratios I think are important, primarily these are thoughts on the Availability/Scarcity of the current mined Bitcoin per Users in the network. Here are a few thoughts I wanted to share with the community, I make a number of blanket assumptions and I don't have an official background in Economics, I am not even sure if this is the right area for this post, so take what I say with a grain of salt
Given we have ~14,000,000 BTC Mined and Spendable currently
Given we have an estimated number of users of ~2,000,000 (Inflated Slightly from the recent Juniper Networks Study which estimated 1.5 Million Unique Users of Bitcoin, I bumped it to 2 million to make things rounder and in case we have grown a bit since then)
That gives us a ratio of ~7BTC/1 User in the network. Currently I think their exists an abundance of Bitcoin due to the fact that not every user in the network will buy 7 or more coins, I understand the fact that many users in the network own much more or much less than this number, but let us temporarily ignore this fact and just make assumptions for the sake of round numbers. I don't think every-time a Block is solved (25 BTC), ~every 7 new Bitcoins Minted into the economy a single user in the network is investing upwards of 1162-2100 USD or more based on the current price into Bitcoin, so every-time a block is solved we need more than ~3 new Users to eventually purchase these newly minted coins.
If we assume a few gross distribution ratios just for sake of gathering more numbers, in the United States 2011 (I believe):
1% of the Population owned ~34.6% of all the wealth in the United States
We can describe the above ratio we arrived on previously as - 700BTC/100 USERS
So 1 User out of 100 would ~ own 700BTC*.346 of the BTC available = ~242.2BTC, which leaves the the other 457.8BTC/99 Users
So even if a small percent of the networks users own a disproportionate amount of the Bitcoin, their are still ~4.5BTC/1 User which I think is still too much of an investment for every user in the network to make.
I think that until this Available Bitcoin to User Ratio gets closer to 1BTC/1 User or even flips to 1BTC/2 Users or lower than this, things in Bitcoin land will get much more interesting. So we need our user-base too grow roughly 7 to 14 times the number of Users to 14 Million or 28 Million Users or more. In regards to a time-span that a shift like this could occur with a globally adaptable technology, it took a network like Facebook to grow from single digit million number of Users to ~100 million Users in ~1 years time-span.
If anyone wants more stuff, I wrote some Python code to calculate the all of the categories in the 2011 US Distribution model (Not just the top 1%) and I did this for a Champagne model (20% own 82%), I also looked at other variations like nearly 21 Million BTC available and things like Multiple Billions of users as well. Let me know and I can collate the info/post the scripts.
TLDR; The more users we get makes our ability to purchase a single coin much more scarce. Eventually we will have more users than the number of Bitcoin available, a shift like this can take 1 years time once a few million users vested and actively using the technology.
Cheers,
juju
